Last week in my column regarding ‘Fear of Failure’ I promised to write about fear of change.  If you have the ‘fear of change phobia’ and you are living on Planet Earth you are facing a very hard road ahead in your professional life.

Several years ago, during a merger of two very large companies, I ran into this first hand.  I worked for the company being acquired.  Top management really wanted to see the management of the acquired company prevail (and it did).   But the controller of the acquiring company was vehemently opposed to this and in numerous ways attempted to thwart the consolidation of the two separate systems.  It was not an act of direct intent but his inability to accept the fact that his world was going to change in a big way and he may or may not survive that change.  Granted, he was close to retirement age but he was intelligent and, more importantly, had a major role, if he wanted it, in creating a new company emerging from the consolidation of two companies.  Instead, he dug his heels in and eventually paid the ultimate price which was the loss of his job.  How sad that after a career of years with the same company that it ended that way.  The company survived and moved on.  But it had to be painful for him.

It does not matter your age, or whether you are male or female.  It does not matter if you’ve been there thirty years or you personally oversaw the design of the current systems, practices and procedures.  In business, as in life, nothing ever stays the same.  I have always told people that I tried to calm myself during some particular storm or other by telling myself that in business, it is not life or death.  But, in life it can be.

What are some of the ‘common denonimnators’ in business people who are opposed to change, especially CFO’s and Controllers:

  • Number One Reason:  They are not interested in learning anything new.  In other words, they do not keep up on changes in their industry and/or profession.  They avoid attending webinars, seminars, etc. and perceive them as a waste of time.  The last time they bought a book about their profession was when they paid for a college textbook.
  • Number Two Reason: They are not interested in acquiring new skills.  If you find a CFO or Controller who cannot use Excel to some extent or never heard of Power Point they are probably change averse. (Do not assume all of them are ‘old people’) There are a lot of younger employees you would expect to be proficient who are not.
  • Number Three Reason:  They do not enjoy collaborating with staff or colleagues.  They view all meetings as a waste of time and see no reason to communicate or share their thinking.  Controllers and CFO’s who exhibit these characteristics are generally very rigid in their thinking and are not at all open to proposals for changing anything.
  • Number Four Reason:  I find this to be a painful one and that is insecurity or low self-esteem.  I have run into this in my career.  Someone who is constantly afraid of losing their job will not be able to even deal with change.  They are too busy keeping a stranglehold on the status quo.  The concept of ‘the Gold Watch after fifty years’ is dead and gone and is not coming back.  If this describes you, it is unlikely you will ever become an agent of change.
  • Number Five Reason:  They are not strategic thinkers.  Unless you can look ahead, whether it’s for your Finance Department or your company, if you cannot formulate a strategy to achieve growth  in your sphere of influence once again you cannot be an agent of and for change.

If you find yourself guilty on any of the above counts, where do you begin to change yourself…… to leave behind the mindset and habits that will eventually hold you back?  I firmly believe it is in the classroom wherever that might be.  Pay attention to your surroundings at work.  Search the internet for trend analysis related to your industry or profession.  Take some online courses.  Buy a book.  Have an ‘out of body experience’ and pretend that you are a consultant newly hired to help streamline your company (see my earlier columns on this).  Make a list of what you see.  Oh, and by the way, if your company has already hired consultants to streamline your business, get involved.  And even, perhaps, be concerned.

Have a productive Work Week!

Judith D. Sherling, CPA, CGMA




Dear Controllers:

I have a confession to make.  At home, when it comes to cooking, or taking a digital photo, I have no fear of failure.  Burnt dish.  Start over.  Fuzzy photo, delete it.  Start over.  However,  I have spent an entire career terrified of failing at work.


The Everyday Controller

So, let’s discuss the fear that might be holding you back by discussing some of mine.  Here are a few of those big fears (in no order of importance):

1) Forgetting something important like a meeting or a deadline.

2) Creating a flawed spreadsheet.

3) Creating budgets, forecasts or business plans with flawed data or assumptions.

4) Concern about mergers that might lead to job loss (mine)

5) Fear of new bosses.

6) Fear of owning an idea or project that once underway cannot succeed.

7) Fear of not knowing what crisis is out there somewhere waiting to pounce.

8) Fear of losing the respect of direct reports

9) Fear of losing the respect of people I reported to

10) Fear of publishing inaccurate Financial Statements

Shall I go on?  There’s more.  But I try to keep my articles and posts to around 500 words.

Is there a cure for I.T. projects run wild?  Or Accounts Payable sending out a duplicate $700,000 payment.  What about forecasts that are wide of the mark and for which there is really no defense?

These are just a few of the ‘horrific’ events I have lived through.  The worst of them are the ones you don’t see coming and are usually the result of a staff member failing to follow through.

How do we survive these and live to work another day?  Meds?  No.  Here’s some advice all of which I have learned the very hard way.

1) Always take responsibility for the mistake even if it’s something that occurred at staff level.  After all, you are responsible for them.

2) If you undertake a project, try to take ownership of it as best you can.  If it’s a project assigned to you by your CFO or CEO, if there are problems – just keep them posted so that there will be no surprises down the road.  Communication is key.  Put your updates in E-Mail form and retain them in the project file.  It’s the professional thing to do.

3) Whenever possible, try to validate your data.  There is nothing scarier than data that comes from spreadsheets using links that need to be refreshed.  (See my earlier posts on Spreadsheet errors)

4) Do not spend time building spreadsheets as a time filler or so you look busy.  There are always lulls in your work schedule.  Fill them by getting up and ‘walking around’ as some famous efficiency experts have long recommended.  Talk to people.  Go on line and read controller blogs like mine! Join ‘Linked In’ and find groups of like minded accounting and finance people.

5) Repeat after me ‘my staff usually knows more about what’s going on than I do!’   I can’t begin to tell you the number of heads up I received from staff members warning me of impending doom (or danger).  If you take the position that you are the important boss of everybody and no one is as smart and educated as you are………….you are risking falling flat on your face.  And your staff……….they’ll just step over your body.  Or, you can be a coach and a mentor to them.  You can be happy and not threatened when they do well or stand out to upper management.  You can care about them and their personal challenges (there will be many).

Next week we will delve into the area of ‘change management’ or how you can become an ‘agent for change’ within your sphere of influence.





Following up on the last few posts on Month-End closing it’s time to get your arms around the entire closing process.  I believe in this case we need to start at the end and not the beginning.

Below are my recommendations:

  1. Create an Agenda for your ‘Post Closing Meeting‘.  Personally, I think there should be a staff meeting every month right after closing that addresses all issues that arose during the process.  As the closing process improves, the meetings will become less time consuming.
  2. Gather all staff involved in the closing process within one to two days after the closing is totally complete.  Have them bring all checklists and instructions as well as other notes that they think is relevant.
  3. Ask each staff member to be ready to ‘report’ any findings (good or bad) that may have affected the close process.  I recommend letting staff members speak first in a ’round table’ session.
  4. If you can, use a flip chart/board to list the issues that arise.
  5. When issues are identified, you may need to handle them or assign them to someone to investigate.
  7. Morning meeting – bring doughnuts.  Afternoon meeting – bring cookies.

For example, during the ‘Post Mortem’ you discover that your Accounts Payable department continued processing expenses into the system for the current month after the month end cutoff but before you actually closed the books.  In other words, somebody will most likely need to accrue into the next month these expenses or, if still possible, reverse and have rekeyed in the new month.

The question becomes for your post-mortem …… why did this happen?  Was A/P not informed of the impending cut-off?  Errors are time consuming.  So how can you drive out such time wasters?

What if a key staffer was out sick, or otherwise absent during the process?  Did everything come to a screeching halt?  Is anyone cross trained to perform those duties?  If not, there’s a problem sitting squarely in your lap.

Let me point out that ‘post-mortems’ should always be a learning experience and not just for your staff……for you as well.

As a controller, most of your life is spent being reactive.  If you don’t believe that, make a list tonight of all the things you want to accomplish tomorrow.  Put it on a time sheet.  For instance, 8:00 a.m. – finish Segment X G/L account review – 9:00 a.m. – Read lease for new copier – 10:00 a.m. – call a Vendor about a problem……………….then, I challenge you to get all of these things done, in that order and on time.  I’m going to gamble and say you won’t.  The truth is ‘the day owns you’ and not ‘you own the day’.  Agree?  I believe that my ‘post-mortem meetings’ are not reactive.  They are proactive if you follow through to see if needed improvements are made before the next month end close.  Try it.  Let me know how it goes.



Continuing our discussion of issues related to a fast closing:

6.  Holding up Closing Process to perform reconciliations: If you are performing reconciliations of certain ‘critical accounts’ before you close your books, if at all possible, try to move the reconciliation process to mid- month, or just after all closing transactions have taken place.  Shifting these activities away from the last thing you do at month end prior to close will improve your closing process efficiency.  Every controller should use their judgment and understand what does and does not work for them.

7.  Unresolved Inventory Costing Issues: Obviously we want our Cost of Goods Sold account to be accurate (not perfect) as we close the books and produce our financial statements.  Problems in COGS ripples through your entire Income Statement and Balance Sheet.  One of the most important KPI’S (key performance indicators) is Gross Margin %.  Time spent at month end trying to correct problems can slow down the closing process.  One suggestion is to run reports on sales and margins weekly and assign someone the responsibility of checking through to see if margins look distorted.

8.  Lag time related to posting customer payments on account: I know what you’re  thinking.  This sounds more like an Internal Control problem than a month end closing issue.  However, in some industries, payments on account may not be so straight forward.  If you’re using a lockbox, are you waiting on reports from the bank to apply cash?  Do you have multiple locations taking customer payments?  Sometimes personnel are not quite sure how to apply a payment.  Is unapplied cash involved?  Is your Accounts Receivable department understaffed or overwhelmed?  If you’re having this problem, it’s time for one of those ‘root cause analyses’.

9.  Too many spreadsheets or other systems with interfacing data being fed into the system: This is a minefield all its’ own.  As companies grow, expand operations, increase their number of locations, often time all of this growth is not smoothly integrated.  You end up with interface issues, people sending in month end work for someone to input, etc.  This requires a lot of accounting staff time chasing down all the moving parts of your company.  As a controller, if it is within your power to improve or fix this,  you need to give thought to how that can be accomplished.  Work with what you have first.  Can your software vendor help you integrate some of these ‘outliers’?  Assemble your staff and brainstorm a solution.  Are you Controller & staff?  Talk to other controllers, but again, your software vendor may be your best first step.

10.  Failure to recognize how critical timely month end closing is to management.

When growing a plant, you may do everything right, water, sunlight, fertilizer.  But if you do just one thing wrong, for instance use the wrong soil type, then nothing else matters because the plant will die.  We call this ‘the limiting factor’.  Think of a barrel.  It’s a good barrel.  Well built with solid wood planks.  There’s just one problem.  One plank is missing.  Can you fill it with water?  No.  That missing plank is the ‘limiting factor’.  So too is ‘Failure to recognize how critical timely month end closing is to management’.  If you think that management is overly focused on month end close and that your staff has better things (or you) to do then you are part of the problem.  In the new age we are living in, if you don’t think speed is essential then you need to become more educated about issues in the accounting profession.

Next week we will delve into an after closing process that all Controllers should practice.


Let’s continue  our discussion from last week about what might be some obstacles to closing our books in a timely manner.

1.  Too many transactions pour in at month end:

This is symptomatic of companies with ‘satellites’, off-site locations that might be hand writing paperwork such as bills of lading and sending them in via mail or e-mail.  It could also stem from personnel who lack knowledge on how to handle exceptions in the system.  Credit Memos pose their own unique challenges in many systems.  Does this sound familiar?  What is called for here is an ‘internal investigation’ that can identify the root cause.

2.  Multiple offsite locations disrupt flow of transactions:

While #2 might seem redundant based on #1, the point is that when you have multiple locations who have month end paperwork to submit, reports, spreadsheets, etc. with personnel at these locations who are not really focused on speeding up month end (we’re way too busy to stop what we are doing and get you that ‘number’, ‘report’, etc.) you have a problem.  It’s time for a visit or some kind of meeting, in person or on a conference call.  If offsite personnel have not ‘bought in’ to the need to close rapidly then you have a training issue(s).

3.  Attempting to make accruals and other adjustments at month end that management feels should be reflected.

I’ve seen this problem more often than not.  And, I have been as guilty as others of pushing these adjustments to the very last day.  But regardless of guilt or innocence, it slows things down and that’s what we have to face.  Do you have a Balance Sheet account where you throw everything you don’t know how to handle or what G/L code to use?  We called it a ‘Clearing Account’  and  assigned one of our accountants the task of monitoring the account all during the month.  It helped clean up a lot before last day of the month.

4.  Staffing Issues:

If you are short staffed, and many accounting/finance departments are, then you need to find a way to automate as much as you  can and to strip out processes and procedures that are no longer significant error checking or monitoring functions.  By this I mean that you have to identify obsolescence within your closing process.  Is there anything you can jettison that once was important but no one cares about now?

5.  Outdated Software and Hardware: 

I know that spending on I.T. is about as much fun for companies as spending on their power bills.  It’s a costly and you can’t really put your arms around it.  Every year programs get bigger (or more bloated), data storage starts to fill up, servers are aging out and to fix all this can require a large investment .  If you, as a controller, are in charge of I.T. as well, I sympathize with you.  But, you must make the case that aging software and hardware is costly.  If you are adding to your staff because you don’t have enough people to do the manual accounting work……………..well, there is something wrong with this picture.

I think that’s enough for today.  Tomorrow I’ll post Items 6-10 (Part III).

Controllers need to remember that the Closing Process is composed of a lot of moving parts.  How fast do you think you are performing your month end closing functions?


As a Controller or CFO, the need to get your books closed within days after month end has never been more important.  If you need to bring operations to a halt in order to close payables, receivables and payroll, then you have some significant challenges in your organization.

Of course, getting your books closed in a timely manner is really a vague objective.  What ‘month end close’ is to one company could be something very different to another.  In my opinion, if you don’t have Financial Statements (Income Statement & Balance Sheet) delivered to management by the end of the first week, then the closing process needs to be examined and very closely.  Once you hit the two weeks from close mark  the prior month end is in your rear view mirror and the next month end is ‘closing in’.

I think we can all agree that ‘Closing the Books’ is much more than turning over the dial to the next monthly accounting period.

During my career as an analyst for a large publicly held company with 300+ operations, what was expected was to get the month closed and then print out financial statements which were immediately delivered to management.  At that point, there was no pre-release review of the financials by the Finance Department.  All  financial analysis was performed post publication.    While working as a controller at a large privately held company, it was exactly the opposite.  The owner wanted his financial statements thoroughly reviewed and analyzed before he saw them.  As the company has grown that has become much more challenging especially since the CFO provided ‘footnotes’ to each set of statements (approximately 25+ sets) pointing out the reasons for large or unexpected variances.

Let’s all agree that the books are not closed for the month until the Financials and other associated reports are in the hands of Senior Management.

Here are my TOP TEN  reasons companies struggle with Month End closing (in no order of importance):

  1. Too many transactions pour in at month end
  2. Multiple off site operations disrupt flow of transactions
  3. Attempting to make accruals and other adjustments at month end that management feels should be reflected
  4. Staffing issues
  5. Outdated software and hardware
  6. Holding up closing process to perform reconciliations
  7. Unresolved inventory costing issues
  8. Lag time related to posting customer payments on account
  9. Too many spreadsheets or other systems with interfacing data being fed into the system
  10. Failure to recognize how critical timely month end closing is to management

Next week we’ll investigate the ten reasons companies stumble when it comes to wrapping up their month end close within a matter of days.

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